Step-by-Step Guidelines for Securing a Loan Against Property

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Loan Against Property

A Loan Against Property, also known as a mortgage loan, is a loan you can take from a bank or financial institution by keeping your property as collateral. This type of loan is secured, meaning the bank can take possession of your property if you don’t repay the loan.

If you need money and own a residential, commercial or industrial property, you can use it as collateral to get the loan. The process of getting a Loan Against Property is simple and easy. You can use your property or a co-owned property to get the loan. If the property is co-owned, all the co-owners will be joint applicants.

The bank will keep the ownership deed of the property until the loan is fully paid off. This type of loan is very flexible as you can use the funds for any legal purpose, and it usually has a short processing time.

Step-by-Step Process for a Loan Against Property Loan

The loan application process for taking a Loan Against Property (LAP) has become more effortless than ever. To obtain a loan, follow these steps:

  1. Complete the application form: A potential borrower can apply for a loan online or offline. If applying offline, visit the nearest branch of a trusted financial institution like ICICI Bank with all the necessary documents and fill out a paper application form. If using online, visit the financial institution’s official website and fill out the loan application form provided. Provide the correct particulars since these will be verified in the next step to confirm your eligibility as a borrower.
  2. Confirm your details: After submitting your details, the financial institution will contact you via call, email, or SMS to verify the information you have provided. They might ask specific questions related to the information you have provided. Your credit score or CIBIL score will also be checked in this step.
  3. Submit the relevant documents: In this step, you must attach the documents that support or prove the details you provided in the application form during the initial stage. Standard supporting documents are proof of identity, proof of residence, proof of income for salaried and self-employed individuals, and property documents.
  4. Wait for document verification: After successfully submitting the required documents, wait for the financial institution to conduct the technical verification. The lender’s representative will cross-check the information in the application form with the documents you presented. As part of the verification process, the lending institutions may either ask the applicant to appear in person to answer their queries or send their representative to the prospective borrower’s house or office to check their authenticity.
  5. Await legal review and property valuation: If the prospective borrower accepts the loan offer, the lender will move on with the next step in the authentication process, i.e., legal verification. During this stage, the lending agency will send your documents to their legal team for final validation. Their legal experts will scrutinise the property-related documents to ensure the asset you are pledging as collateral is free from any legal disputes. After the legal examination, the lawyer will submit a detailed report regarding the property to the lender. Once the loan approval department of the financial institution receives the legal report, they will proceed with the disbursal of the loan amount, which is calculated based on the market value of the land. Many lending agencies take only a few days to complete this process, and the funds are transferred directly into the borrower’s bank account.

What should you avoid when applying for a LAP?

If you are planning to apply for a loan against your property, you should keep a few things in mind to ensure your application is accepted and completed.

  1. Firstly, comparing the interest rates offered by different lenders before choosing one is important. This will help you find a lender with lower interest rates, thus making your loan more affordable.
  2. Secondly, you should be careful about the tenure of the loan. When taking a Home Loan or LAP, it’s essential to remember that the longer the tenure, the more the interest payable. So, consider choosing a shorter tenure based on your monthly repayment capacity.
  3. Thirdly, ensure you declare the correct information about your property while filling out the application form. Any legal disputes on your property may lead to your application being rejected or put on hold.
  4. Fourthly, check the disbursal time of the loan. Different lenders take different amounts of time to process and release funds. If you need the money urgently, ensure you choose a lender who can disburse the loan quickly.
  5. Finally, keep in mind that your credit score will be checked while processing the loan application. You may get a lower interest rate if you have a high credit score. So, make sure that you maintain a good credit score by paying your bills on time and avoiding unnecessary debt.


A Loan Against Property is a secured loan you can obtain by keeping your property as collateral. The loan application process is simple and involves completing an application form, confirming your details, submitting relevant documents, waiting for document verification, legal review, and property valuation. It’s important to compare interest rates, pay back the loan on time, declare the correct information about your property, maintain a good credit score, and, most importantly, choose a lender with a quick processing and disbursal time.

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